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Macri vs. Cristina. | Joaquin Temes

The sands of time bring us closer to the day of
reckoning, when we will finally know our fate
and hopefully look forward with some very
elemental level of certainty to the next phase.
Yet, things continue to happen as we move
closer, and even though former president Cristina Fernández de Kirchner played it mysteriously
once again this week, she proved her power
of attraction yet again, garnering the support
of tens of thousands of followers while becoming the centre of attraction for TV channels
and news websites across the country. Yet,
this time “fear” of Cristina didn’t generate a
financial panic. Instead, currency markets
remained tranquil, with Argentina’s default
risk timidly sliding as Wall Street, and the
United States, has firmly decided to put its
eggs in President Mauricio Macri’s basket.
The next few days and weeks could prove
decisive for the country, torn between Macristas and Cristinistas, with no clear path
toward normalcy. Hoping the peso-dollar
exchange rate doesn’t shoot past 50 is both
Macri’s and Wall Street’s bet, while Cristina will remain as silent
as possible, waiting for the economy to continue spiralling out
of control.

According to JPMorgan Chase and Standard Chartered, the
Argentine peso should remain rangebound, with a target of 50
pesos for every dollar from here to the election at least. Both
financial institutions have told their
clients that Argentina’s currency
will “outperform” its forward curve,
which essentially means it is time to
engage in the famous “carry trade”
or, as locals like to call it, la bicicleta.
It makes sense. The International Monetary Fund has lent the government the
biggest amount of funds it has ever put out
to play, while it has continuously expressed
their support for measures that traditionally
go against their own ethos, including price
controls and increased Central Bank intervention in the currency markets. Higher interest rates – which are already amongst the
highest in the world – along with bond buybacks by official entities, along with a positive account balance and the influx of dollars
due to the exporting of grains have helped
put a lid on the dollarisation of portfolios. For
the time being. As Standard Charter noted in
a recent research note, they don’t know how
long this will hold after the election.

All of this is a clear indication that the United States is putting its money where its mouth
is. Donald Trump jumped on the phone with
Macri for a mere 10 minutes this week, while
the US Embassy announced a loan aimed at
shoring up Argentina’s infrastructure through
the national sovereign wealth fund, OPIC.
Many are quick to point out the previous business relationship between Macri and Trump,
but this obviously goes further and has
more to do with geopolitics than golf.

As La Nación’s Carlos Pagni pointed out
a few weeks ago, the slow motion train
wreck that is Nicolás Maduro’s Venezuela plays into the hands of Macri and his
hopes for re-election. National Assembly President
Juan Guaidó’s international support is most strongly backed by
Washington, which has been consistent in their behind-the-scenes
attempts to oust Maduro. The Trump administration has also reversed the Obama-era approach to Cuba, putting further pressure on the island nation, which is the cornerstone of Maduro’s
support. This has to do with Russia and Iran, two key allies of the
Venezuelan autocrat looking to consolidate a power base in the
American continent, historically Washington’s backyard.

In the context of the tug-of-war over Venezuela, Macri comes
out as a winner in the face of the Argentine electorate. With the
Kirchnerites closely linked to Maduro — remember how Hugo
Chávez bankrolled Cristina’s presidential campaign? — and
Venezuela quickly becoming South America’s Syria, Macri can
seek to differentiate himself while pointing to
the strongest point of his presidency, international support.

Of course, this is not enough. As his electoral position weakened considerably, to the
point where polls began to show he could
lose against Cristina, Macri and his electoral
team, namely Cabinet Chief Marcos Peña and
Ecuadorean advisor Jaime Durán Barba,
sprung into action. After securing the IMF’s
support and announcing price freezes to
control inflation, they launched a 10-point
plan to sign a truce with non-Kirchnerite
Peronists. While it may seem like too little too
late, the PRO Party, which controls the ruling
Cambiemos (Let’s Change) coalition, is beginning to take charge of the agenda. They
reached out to the likes of Roberto Lavagna
and Sergio Massa, both of whom rejected Macri. The Casa Rosada, with Interior Minister Rogelio Frigerio leading the charge,
even invited Cristina to discuss the plan.

Whatever the merits of Macri’s 10 points, the two big issues
coming up have to do with his (only) allies, the Radicals of the
UCR. Tomorrow, Córdoba Governor Juan Schiaretti is expected to handily take the election
for a fifth consecutive Peronist victory in the
second most populous and richest Province
of the country. Vying for second place are two
Radicals, after the Cambiemos coalition effectively suffered a schism. In 2015, Córdoba gave
Macri the presidency. Furthermore, toward the end
of May the Radicals will hold their national convention, where an important portion of them will be
asking for an expanded coalition that includes nonKirchnerite Peronists. Even bolder, some are putting as a condition to their continued allegiance to
Cambiemos that Macri steps aside, letting a national primary select a unity candidate who would
beat Cristina in a first-round vote; Buenos Aires
Province Governor María Eugenia Vidal and City
Mayor Horacio Rodríguez Larreta would guarantee victory in their districts, meaning the presidential candidate wouldn’t come from the president’s
party.

Macri, of course, despises this idea. And knows
he has Vidal and Larreta in his corner. Cristina,
his main antagonist, did take the stage this week
presenting her blockbuster book titled Sinceramente at the Buenos Aires Book Fair. Incredibly,
CFK’s book has become a boon for printers and
book stores, selling out in just hours and forcing
multiple print runs. They are expected to sell
some half a million copies. Her Thursday presentation was a de facto ‘cadena nacional,’ meaning
every TV channel and news outlet was focused
on covering it. Weirdly, love or hate the Kirchners, it seems like everyone tuned in to
hear what she had to say. While Cristina
did call for a “national pact,” it seemed like
she was playing a role in order to seduce
more moderate voters. Yet, a host of hardcore Cristinistas sitting in the audience gives
clues as to what such a presidency would look like.

If Macri and Cristina need each other in electoral terms, Argentina needs them and the political leadership as a whole to
take advantage of this crisis. Both of them have held onto their
strategies, but the clicking of the clock will set them into action.
Córdoba and the Radical convention are events neither of them
control which will undoubtedly have an impact. Things are beginning to pick up pace.